South Korea Finance Minister Says Chip Boom to Last at Least Through 2027
South Korea’s finance minister told CNBC the semiconductor boom should last at least through 2027, even after chip stocks fell.
“For now, our view is that we can sustain this growth at least through next year,” Lee told CNBC. “That’s because the gap between demand and supply for semiconductors is still very wide, and supply is still being expanded.”
His comments followed a sharp fall in semiconductor stocks this week, hurt by investor concerns about interest rate hikes and rising competition from Chinese companies. South Korean chip stocks including SK Hynix and Seoul Semiconductor were part of the sell-off, along with U.S. giants such as Nvidia, according to CNBC.
Lee said chip stocks have fueled volatility in South Korea’s stock market this year. He attributed the market’s wild swings to the semiconductor industry’s larger share of the economy than in other countries, but said South Korea’s economy is “solid.” Lee also said the country expects to collect more taxes than initially projected this year and will ultimately be in a stronger fiscal position because of the chip boom.
On Thursday, an opinion column in Maeil Business Newspaper, a prominent South Korean publication, urged the government to prepare for a coming slowdown in the artificial intelligence boom. The author said two experts expect a “flood of new supply” of semiconductors that will turn the memory market “into a red ocean” by 2029, according to a CNBC translation.